EB5INVESTORS.COM
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If an EB-5 fund does
not provide for staggered
distributions to EB-5
investors as they become
eligible for repayment,
the EB-5 sponsor is
not authorized to make
distributions in that manner.
CONCERN 2:
EB-5 INVESTORS FACE LONG VISA WAIT
TIMES AND, AS A CONSEQUENCE, LONGER
DURATIONS THAT THEIR INVESTMENTS
MUST REMAIN “AT-RISK”
CONCERN 1:
EB-5 INVESTORS DO NOT HAVE THE RIGHT
TO SELECT THEIR OWN REINVESTMENT
EB-5 investors made their original decision to invest in
a specific EB-5 project based upon their own review of
detailed offering documents describing the project, the
developer, and other relevant facts. When their capital is
redeployed, however, EB-5 investors have little, if any,
choice in how their funds will be invested in one or more
new investments. Even if an EB-5 sponsor offers more
than one option for reinvestment and allows each EB-5
investor to select among those options, the investor does
not have the ability to select a reinvestment outside of
those pre-selected options.
EB-5 i nve stor s a re u nde r st a nd ably conce r ne d
t hat t he rei nvest ment has been sele cted for
t h e b e n e f i t o f t h e E B-5 f u n d s p o n s o r o r t h e
orig i na l project developer, a nd not necessari ly
w ith the best interests of the EB-5 investors in
m i nd. In some cases, EB-5 i nvestors have fi led
or threatened legal action against the sponsors
of their EB-5 funds, claiming that the sponsors
have selected reinvestments that have a higher
level of r isk t ha n t he or ig i na l i nvest ment, a nd
t hat t he sp on sor s have made t he sele c t ion for
their own economic benefit.
The U.S. government’s visa control office first imposed
the “retrogression” policy on EB-5 investors from
mainland China in 2015, but it was not until 2018 that
it was estimated the delay caused by this policy could
be as long as 10 to 15 years for these investors. As a
result of these extremely long anticipated delays,
the children of some EB-5 investors will “age out”
(meaning they will no longer be eligible for a visa based
on their parents’ EB-5 application) before these EB-5
investors obtain their visas.
Some EB-5 investors have filed or threatened litigation
against EB-5 fund sponsors, seeking a return of their
capital on the grounds that they were never informed
that they would have to wait so long to obtain an EB-5
visa. The difficulty is that while some EB-5 investors
have abandoned their visa petitions and received a
return of their capital, other EB-5 investors in the
same EB-5 fund may wish to proceed with their
visa petitions. Their capital must remain “at-risk,”
according to USCIS policy, until they have completed
their two-year sustainment period.
CONCERN 3:
NOT ALL EB-5 INVESTORS
WILL BE ELIGIBLE FOR RETURN OF
THEIR CAPITAL AT THE SAME TIME
It is possible, and even likely, that some investors in an
EB-5 fund will be eligible to receive a return of their
capital in five years. Other investors in the same EB-5
fund may not be eligible for 10 or more years. Most
EB-5 funds were originally designed to have the ability
to make distributions of capital to all EB-5 investors
at once when the original investment was repaid,
but those EB-5 investors who are eligible to receive a
return of their capital do not want to wait to be repaid